As the General Manager of a public power system in Nebraska, Custer Public Power District, I know some of the history of public power in Nebraska.
Being so close to the subject, I sometimes catch myself thinking that everyone knows as much as they ought to about Nebraska’s strong public power advantages and heritage.
That’s not true, of course, so allow me to take you down memory lane. For some readers it may be familiar territory. For others, it may be new information.
First let’s explain what the term “public power” means. It means electric utilities that are owned by the public. They operate on a not-for-profit basis, at cost, as opposed to profit-making utility companies whose first loyalty is to shareholders who primarily live elsewhere.
Public power utilities come in three flavors. There are public power districts, which cover all or part of a county or several counties, and are much like a school district in that the business they operate is owned by the public and governed by a board of directors elected by the consumers in the area served during each general election.
Municipal utility systems are similar, except that they are creatures of city government and their operations are pretty much confined to city limits and the board of directors are either elected officials or appointed by the city council or mayor.
We also have a few cooperatives, primarily along western and northern edges of the state. They, too, are not-for-profit but rather than being a quasi-governmental district, they are private corporations that use the cooperative business model. They are owned by the customers, who elect the board at their annual meetings.
In the early days of electricity in Nebraska, private, shareholder-owned, for-profit electric companies served mainly towns and urban areas. The Nebraska Legislature — and more specifically George Norris — realized that the private companies were not going to service rural customers because they could not make a profit.
Norris developed state laws that gave people the ability to form public power districts and rural electric cooperatives. They also gave public power the right of eminent domain to ensure that
Nebraska would be a completely public power state without private electric companies making a profit on electricity, since electricity had become a necessity for modern life rather than a luxury item.
Nebraska became and still is the only state in which 100 percent of the customers are served by electric utilities that they own. Not one penny of dividends is tacked onto electric bills and sent to out of state or foreign investors.
Nebraska Public Power District (NPPD) was formed to serve retail operations and also to be a wholesale supplier to some rural public power districts and cooperatives. Some of these rural public power districts and cooperatives are actually served by a generation and transmission cooperative directly. The Nebraska Generation and Transmission (NEG&T) cooperative then purchases wholesale power from NPPD and passes it through to its members.
NPPD is the wholesale supplier for Custer Public Power through NEG&T, although we are three separate entities. NPPD supplies wholesale power to Custer. We buy it and then distribute it to some of you. This concept is the same for other public power districts and cooperatives in Nebraska served by NPPD.
A few public power districts and cooperatives in western Nebraska receive their wholesale power from Tri-State Generation and Transmission Cooperative, in much the same way as we do from NPPD. Again, Tri-State is a separate entity owned by the local systems that buy power from it, and it is those local systems who elect directors to the Tri-State board.
Having organizations like NPPD and Tri-State gives consumers the enormous advantages of scale and technical sophistication. Custer PPD, like all the other PPDs in Nebraska, is not an isolated little “buggy whip” operation. It is part of a larger network that pools all kinds of resources for the good of the consumers.
Being in that network also gives us a certain measure of our own “energy independence.” When we need to buy power, we are not at the mercy of out-of-state utility holding companies whose focus is maximizing profits for the next quarterly report.
Custer PPD was formed in 1943 to serve the rural customers in central Nebraska, which later included all or part of 13 counties. Custer PPD was formed by the customers that we serve. We are governed by seven local directors who are elected locally and all of whom receive their power from Custer PPD and pay the same electric rates as every other consumer. They are customers who represent their fellow customers.
This unique distinction of being the only state in the union which is 100 percent public power is one of the major reasons why Nebraska is ranked 7th in the nation for having the lowest electric rates. For the most part states whose rates are lower are the lucky few whose geographic good fortune put them near huge hydro-electric resources, such as the Columbia River in America’s northwest or huge coal fields in Kentucky.
There’s one thing that I particularly like about all of this. It’s a story that proves once again that here in rural Nebraska, we know how to take care of ourselves, take care of each other, take care of our communities, and take care of business.
It’s a story worth passing on to the next generation.
By Rick Nelson, general manager of Custer Public Power District